For IT administrators and security managers at growing startups, choosing the right authentication protocol can feel like a critical fork in the road. Identity Federation and Single Sign-On (SSO) are no longer optional, they are requirements for compliance, automation, and security. Yet, between SAML and OIDC, the decision isn’t always clear. Both protocols enable secure user authentication and access management, but they differ in how they work, how they integrate with SaaS platforms, and where they shine.

This guide breaks down SAML vs OIDC and explains their strengths and challenges to help you choose the best fit for your environment.

What is SAML?

Security Assertion Markup Language (SAML) is an XML-based protocol used for exchanging authentication and authorization data between an identity provider (IdP) and a service provider (SP). It has been the backbone of enterprise SSO for nearly two decades.

SAML was designed with web applications in mind, particularly in enterprise environments where centralized authentication was needed across multiple internal systems. The protocol relies on signed XML assertions to validate a user’s identity, enabling seamless access to applications without requiring separate logins.

Because of its history and stability, many legacy and on-premises applications still rely on SAML for authentication today.

What is OIDC?

OpenID Connect (OIDC) is a modern authentication protocol built on top of the OAuth 2.0 framework. Instead of XML, OIDC uses JSON Web Tokens (JWTs) for exchanging user identity information.

OIDC was created with today’s cloud-first world in mind. It integrates easily with APIs, mobile apps, and modern SaaS platforms, making it a natural fit for startups that rely heavily on cloud-native tooling. It also provides stronger support for delegated authorization, a crucial requirement when applications need to interact with APIs on behalf of users.

For companies working with micro-services or building customer-facing apps, OIDC is often the more flexible choice.

How Do They Handle Authentication Differently?

While both SAML and OIDC solve the same problem—secure authentication—they handle it in different ways.

• SAML:

  The IdP generates an XML assertion, digitally signs it, and passes it to the service provider. The SP then validates the assertion and grants access. The process is relatively rigid but extremely reliable in web browser–based workflows.

• OIDC:

  OIDC uses tokens, most notably the ID token, which is encoded in JSON and transmitted via HTTPS. This token contains user identity information and can be validated directly by the application. Because it is built on OAuth 2.0, OIDC also supports secure API access, which is key for SaaS and mobile integrations.

In short, SAML was built for web logins, while OIDC was built for apps, APIs, and the modern web.

Practical Use Cases

The real difference between SAML and OIDC comes down to where they work best.

Where SAML Excels

• Enterprise web applications that were developed before OIDC became standard

• On-premises systems that need to integrate with corporate directories

• Organizations with compliance-heavy requirements that trust SAML’s maturity and broad vendor support

• Partner-facing portals where XML-based assertions remain the standard

Where OIDC Excels

• Modern SaaS platforms that expect JSON-based token exchange

• Mobile and desktop applications that require lightweight authentication

• Startups leveraging APIs extensively across their stack

• Customer-facing products that need flexible identity federation options

Security Benefits and Trade-Offs

SAML Security

SAML’s XML signatures provide strong integrity checks, and its long history means vulnerabilities are well understood. However, XML is complex and prone to implementation errors. SAML also lacks built-in support for API security, making it less suited to today’s cloud-native architectures.

OIDC Security

OIDC’s reliance on JWTs makes token validation faster and easier to implement. It works seamlessly with API authorization, giving IT teams more flexibility. On the downside, OIDC is newer, and improper implementation of OAuth flows (like implicit flow) can lead to vulnerabilities.

Both protocols support multi-factor authentication (MFA) and least privilege access controls, but OIDC often integrates more naturally with automation and modern identity providers.

The Role of the SSO Tax

One of the main frustrations IT admins face with SAML is the “SSO tax.” Many SaaS vendors treat SAML-based SSO as an enterprise feature, available only on higher subscription tiers. For budget-constrained startups, this becomes a blocker when trying to enforce consistent access management across the stack.

OIDC, by contrast, is more likely to be included in base-level SaaS integrations, making it more accessible for startups that need secure authentication without inflating their costs.

Key Challenges in Implementation

No matter which protocol you choose, implementation challenges are common.

• SAML challenges: Complex XML handling, difficulty integrating with APIs, reliance on IdPs that may charge for advanced features.

• OIDC challenges: Understanding OAuth flows, managing token lifecycles, ensuring secure storage and validation of JWTs.

Both require tight integration with your identity provider and careful attention to provisioning and deprovisioning workflows.

When Should You Choose SAML Over OIDC?

• Choose SAML if you are integrating with older enterprise applications, partner portals, or on-prem systems where OIDC isn’t supported. It is also a safe bet for compliance-heavy industries where vendors have standardized on SAML.

• Choose OIDC if you are building or adopting modern SaaS platforms, mobile apps, or API-driven workflows. OIDC is more future-proof for startups that expect their environments to scale quickly.

Best Practices for Startups

For IT administrators in growing startups, the goal is not just to pick one protocol but to ensure access management is consistent and auditable.

1. Leverage your IdP: Maximize Google Workspace or Microsoft Entra by configuring both SAML and OIDC apps through a centralized identity provider.

2. Prioritize automation: Use automation for provisioning and deprovisioning to reduce risk from lingering accounts.

3. Audit integrations regularly: Keep track of which apps use SAML and which use OIDC, and verify access controls align with SOC 2 or ISO27001 requirements.

4. Plan for SSO tax: Be prepared for vendors that charge extra for SAML SSO and weigh whether OIDC alternatives are available.

5. Implement MFA everywhere: Both protocols support MFA, and requiring it reduces risk of compromised credentials.

Final Thoughts

SAML and OIDC are not competitors so much as tools for different eras of authentication. SAML remains the workhorse for legacy web and enterprise apps, while OIDC powers the modern SaaS and API-driven world. For IT admins and security managers at startups, the decision often comes down to your stack, your compliance needs, and your budget.

The best approach is to support both where possible, enforce strong access governance, and choose automation-first tools that minimize manual effort. By aligning your authentication strategy with your business growth, you ensure security, compliance, and scalability all move together.